India a very high tariff nation, would charge reciprocal tax: Trump

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Last Updated: Mon, Mar 04, 2019 12:37 hrs

US President Donald Trump on Saturday (local time) accused India of being a “high tariff nation” and threatened to impose “a reciprocal tax” to match the heavy duties that New Delhi imposes on goods imported from the United States.

Addressing the last day of a four-day annual Conservative Political Action Conference (CPAC) in Maryland, the US President said, "India is a very high tariff nation. When we send a motorcycle to India, they charge 100 per cent tariff. When India sends a motorcycle to us, we charge nothing. I want a reciprocal tax, at least I want to charge a tax."

A reciprocal tax is a form of tariff applied to imports from other countries that charge a similar duty on goods exported by the US.President Trump has repeatedly called out India for its high tariffs.

“We cannot allow a country to charge 100 per cent and we get nothing for the same exact product. For one thing, they don’t respect us. They think we are stupid,” Trump said.

“But let me tell you something. The world respects our country. They respect us,” the President added.

Indian Prime Minister Narendra Modi, many times, has advocated foreign investments in the country as a part of his 'Make in India' campaign to transform India into a manufacturing hub and generate employment to the youth.

However, President Trump has pressed US manufacturing companies to return home as part of his 'Make America Great Again' campaign.

In a major disciplinary action against India’s trade and investment policies, Washington on February 6, considered to withdraw the policy of zero tariffs on Indian exports to the US.

The Generalised System of Preferences (GSP), under which India enjoys tariff concession costing to USD 5.6 billion of exports to the US, has been the world's largest beneficiary of a scheme that has been in force since the 1970s.

The move to withdraw the GSP program marks a draconian action taken by Trump-led US government to reduce the US deficit with large economies.